AfDB Backs Djibouti SMEs With New $10.75 Million Trade Facility

The African Development Bank (AfDB) has signed a US$10.75 million Trade Finance Transaction Guarantee Facility with Intercontinental Investment Bank (iib East Africa), giving businesses in Djibouti greater access to international trade financing. The agreement, signed on 23 June 2026, is expected to strengthen lending for small and medium-sized enterprises (SMEs), with a strong focus on supporting women-owned businesses that often face greater challenges in securing finance.

The facility will help local companies import equipment needed for renewable energy, manufacturing and telecommunications projects while also ensuring a steady supply of essential goods for the domestic market. By improving access to trade finance, the initiative is designed to support business expansion and strengthen economic activity across key sectors.

Risk Guarantee Opens More Opportunities for Entrepreneurs

Under the agreement, the African Development Bank will provide up to 100 percent risk coverage to confirming banks. This will make it easier for international financial institutions to confirm letters of credit and similar trade finance instruments issued by iib East Africa on behalf of Djiboutian businesses. According to Lamin Drammeh, Manager of the Trade Finance Division at the African Development Bank Group, the guarantee will improve access to international markets for SMEs and women-led enterprises by reducing the financial risks associated with cross-border trade.

Alex Mubiru, Director General for the East Africa Region at the African Development Bank Group, said the operation reflects the Bank's commitment to expanding direct private sector support in Djibouti. He noted that stronger financing for local businesses will encourage investment, stimulate production, strengthen economic growth and help create and sustain thousands of jobs.

Partnership Targets Long-Term Economic Resilience

Intercontinental Investment Bank described the agreement as its first direct partnership with the African Development Bank Group and a major step towards closing the financing gap faced by local businesses. Sohail Sultan, Chairman of the Board of Directors of Intercontinental Investment Group Holdings, said SMEs form the backbone of Djibouti's economy, with more than 70 percent of the country's workforce depending on them for employment. He said improving access to finance is essential for unlocking business growth and creating broader economic opportunities.

The new facility will also give entrepreneurs, particularly women business owners, greater access to hard currency financing needed to invest in future-focused industries. Beyond supporting individual businesses, the partnership is expected to strengthen national supply chains, improve resilience against external economic shocks and help position Djibouti for more sustainable long-term growth.